New figures show small businesses depositing less
The latest figures from the British Bankers' Association (BBA) show that deposits by small businesses into the UK's banks have fallen substantially.
In January 2009, total bank lending to small firms increased by £235m to £54.2bn. However, compared to the previous month, deposits dropped by £1.5bn to £52.7bn, according to the BBA.
“While there are seasonal variations in lending, and although deposits do decrease in January in line with tax payments, in one month they fell by almost double the amount in the first quarter of 2008,” said the FPB’s chief executive, Phil Orford.
“In the past four months to January, deposits fell by £2.3bn. In the same period, net lending has increased by a mere £76m. This disparity shows the urgent need for real liquidity measures. At present, many small businesses are having to find this vital cash flow with little, if any, support from the banks.”
Photo: Nick Smith